Diebold 's Election Division Jolted by Reliability and Security Concerns
Voting Unit Proves Drag on Earnings and Corporate Image
Press Release - www.truevotemd.org
Washington, DC - Diebold's Elections Division is in serious trouble. In this week' s delayed second quarter earnings
report Diebold admits that negative perceptions of Diebold's AccuVote TS and TSx voting systems have produced 'lower
revenue' and lower' margin and earnings per share'. In its second quarter earnings report, Diebold had high hopes its
Elections Division would prop up earnings in its troubled ATM division by 5% to 37%. These problems are likely to
escalate as problems in the largest voting market in the United States, California, may cause Diebold to be excluded
from that market.
After a dramatic 20% failure rate in a recent Alameda County demonstration, over 18,000 TSX voting machines sit idle in
warehouses all over California. Some governments have refused to pay for the units until the problems are fixed.
Election officials in Alameda County are considering another supplier altogether. Diebold's election problems come at a
time when Diebold's core business is suffering from price pressure and the overall down trend in ATM deliveries.
Elaine Ginnold, Alameda County's acting registrar of voters, said problems reported in the recent tests have her
seriously thinking about a switch of strategy in which the county would emphasize paper ballots using optical scanners
rather than touch-screen devices.
Diebold provides election systems statewide in Georgia, and most of Maryland. These states use an older version of the
AccuVote(R) touch screen the TS6, but critics say even those machines are flawed and prone to screen freezes and other
Election Day problems. Law suits alleging security and accuracy defects are pending in Maryland, and in Georgia
Congresswoman Cynthia McKinney recently revealed an internal memo from Georgia Sectary of State Cathy Cox. Attached was
a list of thirty problems with Diebold machines including lack of certification. Oddly Diebold is slated to deploy the
troublesome and out of production TS6 in Baltimore City Maryland next month.
"The problems seen in California are consistent with problems with the Diebold election machines in other parts of the
country. In Montgomery County, MD the IT report on Election Day 2004 found that up to 12 percent of machines failed
totally or partially on Election Day. The same types of problems seen in the California tests -- screen freezes, machine
crashes, and error reports -- occurred in Maryland on Election Day," said Linda Schade of TrueVoteMD.org.
Internally Diebold's problems in California may trigger another management shake-up in the election division. Insiders
say the recent departure of Gregory T. Geswein, senior vice president and chief financial officer was directly related
to Diebold's California problems. Second-quarter net income was $33.3 million, or 47 cents a share, down 24% from $43.6
million, or 60 cents a share in the year-ago period.
Press Contact: Ilene Proctor or Angus Hsu Direct Line: (310) 271.5857
Cell: (310) 721.2336 OR Linda Schade 301-270-6150